Merino wools prices remain strong at Australian auctions

The Australian wool exchange (AWEX) eastern market indicator (EMI) advanced by another 1 per cent or 16ac/clean due once more to the advance of prices being paid in the merino sector. The EMI closed the week at 1566ac which is 19 per cent higher compared to the same sale as last season, the Australian Wool Innovation Ltd said in its ‘Wool Market’ weekly report.

The foreign exchange currency markets played outside the considered norms during the week as the Chinese yuan (CNY) and US dollar (USD) cross rates against the Australian dollar (AUD) behaved in a manner rarely seen. The CNY is generally understood to be unofficially pegged against the USD but the week saw the CNY depreciate by 1.2 per cent against the AUD whilst the USD barely moved at 0.2 per cent lower. As such the USD EMI lifted by 10usc to close at 1224usc/clean kg and the CNY indicator acted conversely and fell albeit just slightly.

The demand for all merino wools remained strong and gains of 40 to 60ac were achieved during the week. The past few weeks had seen a large portion of interest focusing on the super fine (finer than 18.5 micron) fleece sector. Buyers were initially cautious earlier in the season as large volumes within this market segment started to appear registering typically hard to place weak staple strength readings combined with high PobM (position of break % in the middle). Remarkably, the past few sale weeks had seen these types perform the best and selling under the most intense competition of any types, the report said.

The week saw some staggering results as some growers selling tender super fine clips averaged A$3,300 per bale for their fleece lines, with some readings as low as 16nkt within the clip. Almost all this interest is stemming from China.

At the other end of the spectrum, the best super fine wools on offer, and typically the domain of the Italian weavers, look the best value. Whilst still selling at an average premium of around 100ac, and getting strong returns for growers, the price gap between best and lowest quality has narrowed considerably. With the vast difference in top yields achieved, this price variance would be completely eliminated, and price in top per kg of wooltop would end up lower than the cheaper first cost wools, according to the report.

The 19 micron and broader merino wools also came under strong attention from buyers and prices escalated by a general 10 to 40ac. Merino skirting types showed the same tendency as their fleece counterparts with the 18.5u and finer most sought and 50ac dearer. Cother skirting types advanced 15 to 20ac. Cardings slowly continued their rise and added 30ac. Crossbred wools of all types were under price pressure from the outset and lost 35ac for the week.

Competition was strong from all buying sectors, but Chinese top makers were notably more active as reports filtered through of significant sales of Chinese wool tops into Europe. Forward sellers remained the main buying source, but indent and top making orders ably supported as did the Italian interest on better wools. Some Indian orders also were evident, but it is not clear whether they were indented or firm orders needing completion. “Widespread would be the term to best describe the interest,” the report said.

Next week, a larger offering of 46,500 bales will be put for auction at the three centres. Prices are expected to hold up as sentiment continues to remain good. (RKS)

Fibre2Fashion News Desk – India